The Duluth/Arrowhead Economy – In a State of Flux
March 30, 2011
An economic evolution is underway in Northeastern Minnesota. New mining projects, continued development along the North Shore, the growth of health care and increasing numbers of self-employed workers present a fresh generation of choices. While the economy shows signs of life, the path to prosperity raises tough questions about jobs and quality of life.
The Northland's NewsCenter (KBJR-TV) and MPR News have joined forces for a face-to-face forum on April 5 on the economic future of Minnesota's Arrowhead. To learn more just click here.
But to get the ball rolling in advance of the forum, KBJR's Barbara Reyelts talked with two economists to get a handle on how mining, tourism and technology will all morph and change the Arrowhead economy.
Drew Digby, labor analyst for the state Deparment of Employment and Economic Development
Tony Barrett, Professor of Economics in the School of Business & Technology at College of St. Scholastica
Real World Economics / Farming, Mining Still Pay â€” Just Not as Many
March 30, 2011
Sixty years ago, many people argued that poor countries had to reduce their dependence on exporting products from mines and farms because the prices of these primary commodities were locked into inevitable permanent decline relative to the manufactured goods the same countries had to import.
At the same time, U.S. farmers complained that their product prices were too low compared with things they had to buy and called for policies that would return farming to "parity," the same relative prices that had prevailed in the years before the First World War.
Six decades later, countries dependent on agricultural and mining exports are doing quite well, thank you, and better than many industrialized countries. Here in the U.S., North Dakota, still a resource-dependent state, leads the nation with its low unemployment. Much of this stems from oil drilling in the Bakken Formation, but farming also contributes.
High grain prices are one factor fueling a farmland price boom marked enough that Yale economists are writing op-eds about it for yuppie on-line magazines. I just got a notice of the latest tax assessment for my 211 acres of so-so farmland in southwest Minnesota. The increase in value over this year is greater than what I earned last year selling 104 columns to three newspapers.
This all raises a question: Were the naysayers about the inevitable decline of primary commodity production all wrong? Did they send poor countries down a mistaken path?
The answer poses a paradox. The critics were right about the long-term decline of primary product prices, but producing these products remains highly profitable.
The factor that resolves this paradox is increased labor productivity in farming and mining. These industries can be profitable over the long run, but they cannot employ nearly as many people, relative to output, as they did when I was a kid.
Minnesota just had good news about taconite. After a disastrous drop by more than half from 2008 to 2009, expected shipments this year will return to pre-recession levels. All mines are running at capacity, and prices are higher than ever. And some mines are hiring.
However, the number of people hired – about 100 so far, in addition to 3,600 called back after all the mines closed for part of 2009 – tells the story. In 1980, output per worker was about 4,000 tons. In the boom just before the 2009 collapse, it hit 13,000 tons. This year, with 3,700 workers producing more than 39 million tons, it will be some 11,000 tons per worker.
That three-fold increase in output per worker is an example of why mining coal and iron along with copper, tin and other metals can be profitable even though inflation-adjusted prices of these products have declined over time. (Current taconite prices near $200 per ton are exceptional but well above those needed to make Minnesota mines profitable in the long term.)
Farming tells a similar story. During the Great Depression, nearly a third of all U.S. households got their living primarily from farms. In the early 1950s, when cries for "parity not charity" were at their height, that figure was still a fifth. Now, it is under 2 percent, and the bulk of total U.S. farm output comes from a fraction of 1 percent of the population.
Agriculture in Australia and Canada is as mechanized as it is here. In Argentina and especially in Brazil, higher fractions of the population still farm, but the farms that produce soybeans, wheat and corn approach labor productivity levels of the U.S. Brazil, a major beef exporter, has surpassed our country in slaughterhouse capacity, and their newest facilities are more capital-intensive than most here.
Writing this, I anticipate emails reminding me that farming and mining always have been cyclical, that a bust follows every boom and that prices of mining companies and farmland can fall as well as rise. That is all true. Moreover, Robert Shiller, the Yale economist who correctly called the housing price bubble and predicted its collapse, is correct in identifying an unprecedented bubble for U.S. farmland prices as a whole.
That does not, however, belie the fact that increased productivity in primary commodity production can maintain profitability in those sectors even as real prices decline over time. Even after the current boom fades, farming and mining will remain profitable for someone.
All of this omits reasons for the boom. Increased demand from Asia is one factor, but that story is a decade old. Excess liquidity, largely created by the Federal Reserve, is another possible though highly disputed factor. (Product prices aside, low interest rates push up prices of farmland and other assets, just as British economist David Ricardo predicted 190 years ago.) But the role of easy money is a complex story that needs a column of its own.
Our view: Sound sulfate science a must in mining debate
Duluth News Tribune
March 23, 2011
Now wait just one wild rice-processin' minute.
If there's no science behind the state's present limit on allowable sulfate levels in wild rice waters, as Rep. Tom Rukavina, DFL-Pike Township, keeps insisting, how can there be science to justify increasing the limit five-fold, as Rukavina has proposed?
Or 25-fold, as a bill being debated this week in St. Paul would do?
Likewise, how can environmental groups argue so passionately for keeping the limit where it's at without knowing for certain – based on science, scientific research or other hard data – how much sulfate is too much for Minnesota's wild rice waters? If anything, anecdotal evidence suggests the current limit isn't strict enough as wild rice stands have diminished over the years. But maybe it isn't the sulfate levels that are to blame.
The reality is we don't know. Not for certain. That's why a determination has to be made, an unchallengeable, once-and-for-all ruling by scientists and experts, a decision cemented in more than observational data gathered more than a half century ago by the state Department of Natural Resources, which is about all the current limit seems to be based on.
At stake is Northeastern Minnesota's ever-critical mining industry, including copper-nickel mining. That's because mining sites often are blamed for inflated sulfate levels in water and because those inflated sulfate levels just as often are blamed for damaging plants.
Stricter limits on sulfates would be more expensive for mines to meet, perhaps so expensive mining companies wouldn't even try but would rather take their shovels – and their jobs and major economic benefit – and leave our region.
So the state absolutely has to get it right when it comes to rules like what the allowable sulfate levels in waters should be, including waters where wild rice grows.
At least a portion of the legislation being debated in St. Paul this week, the portion that orders the Minnesota Pollution Control Agency to study immediately the response of wild rice to sulfate levels, is sensible. Yes, study, quickly and thoroughly. And then reset the standard.
"This (study would get) us to the question everyone wants answered: What really is the (sulfate level) number that we need to get to that protects wild rice?" as Craig Pagel, executive director of the Iron Mining Association of Minnesota, asked this week in a News Tribune report. "We don't want to see a lot of money being spent on (sulfate control) if there is no real environmental benefit."
And we don't want a lot of time-wasting debate based on … well, based on what, exactly?
Some argue the real issue is the ever-charged prospect of copper-nickel mining by PolyMet and others and that easing the state's sulfate limit is an attempt by some lawmakers to grease the permitting process. If so, that would be as wrong as the many proposals made during previous legislative sessions to toughen environmental measures to discourage and even kill copper-nickel mining in Northeastern Minnesota.
Even with hundreds of good-paying jobs and billions of dollars for the Northland's economy hanging in the balance, PolyMet and others can be made to follow the state's already stringent rules. And those rules can be based, always, on sound science – and not on politics, emotions or ulterior motives.
Sulfate standard rolled back more in House environment bill
Duluth News Tribune
March 22, 2011
Wide-ranging legislation dealing with Minnesota environment and natural resources issues would raise the state's limit on sulfate in wild rice waters 25-fold.
The issue has moved front and center because mining wastewater and runoff from old ore stockpiles adds sulfate into rivers. Sulfate levels are much higher downstream of mining areas, and wild rice stands have diminished in those areas. Bacteria convert sulfate into hydrogen sulfide, which damages plants.
But there is little agreement on how much sulfate is too much for wild rice in different waters across the state.
Amendments to the Environment and Natural Resources Finance bill in the state House of Representatives would raise the sulfate limit from 10 milligrams per liter to 250 milligrams per liter. The bill, HF1010, goes beyond legislation introduced earlier this month by Rep. Tom Rukavina, DFL-Pike Township, which would raise the sulfate standard to 50 mg/liter.
Hearings on the bill began Monday in the House, with public testimony expected on the sulfate rules today.
The legislation orders the Minnesota Pollution Control Agency to conduct a study immediately on the response of wild rice to sulfate levels, but meanwhile sets the higher statewide standard.
In addition, the legislation calls on the PCA to work with mines and other permit holders to develop site-specific ways to reduce sulfate levels in discharge, but prohibits the PCA from enforcing the current standard.
"This (study) gets us to the question everyone wants answered: What really is the number (sulfate level) that we need to get to that protects wild rice?" said Craig Pagel, executive director of the Iron Mining Association of Minnesota.
Pagel said the current 10 milligrams-per-liter standard would be so hard to meet that it could threaten mining expansion projects, including the Keetac taconite plant expansion in Keewatin and the Mesabi Nugget expansion into taconite production near Hoyt Lakes. Rukavina has said low sulfate limits also threaten the proposed PolyMet copper mine project, though company officials say they can meet the current standard.
"We don't want to see a lot of money being spent on (sulfate control) if there is no real environmental benefit. With capital as tight as it is, some companies may simply decide not to proceed if that expense is too high," Pagel said.
Paula Maccabee, attorney for the WaterLegacy environmental group, said the law change would allow industry to do away with an environmental regulation because it would be expensive to meet.
A sulfate standard of 250 mg/liter "would decimate wild rice and result in degradation of the use of Minnesota waters in violation of the Clean Water Act," Maccabee said, adding that lawmakers have no business dictating environmental standards. "There are decades of field research in Minnesota lakes and streams demonstrating that the current water quality rule limiting sulfate pollution to 10 milligrams per liter is necessary to protect natural stands of wild rice. Any citizen who cares about hunting, fishing, harvesting wild rice or natural resources should oppose legislative attacks on the sulfate standard."
Critics say the current wild rice sulfate standard has incomplete science behind it. They say the new limit of 250 mg/liter is the same as the state drinking water standard for sulfate. Critics, including the Minnesota Chamber, which has filed a lawsuit against the current standard, also say it has been applied arbitrarily by the PCA exclusively on the mining industry.
But supporters of the current wild rice sulfate standard say it is based on peer-reviewed, scientifically published data from 60 years ago that show wild rice in low-oxygen waters of Northeastern Minnesota do not thrive in water with sulfate levels above 10 mg/liter. The current standard has been in effect since 1973.
Regulators say the drinking water standard and wild rice standard may have little in common.
"I can drink a lot of coffee, but if I poured that much on my office plant it would probably die,'' said Ann Foss, mining permit section director for the Minnesota Pollution Control Agency. "Just because it's safe for someone to drink water with a higher sulfate (level) doesn't make it safe for other organisms."
Environmental groups note that the Senate version of the bill weakens runoff standards for large livestock feedlots, exempts ethanol plants from mandatory environmental assessment and weakens phosphate standards for the Mississippi River's Lake Pepin pollution reduction effort.
New principles for School Trust lands
The bill also makes changes to state statutes that deal with how some state-owned land in northern Minnesota is managed. The new bill deletes the words "with sound natural resource conservation and management principles" from the goals of Permanent School Fund lands.
Proceeds from mining and logging on school trust land goes to state education accounts, expected to be some $40 million this year, and the state is projecting huge revenues for the fund if mining expands on those state lands to copper-nickel deposits in addition to iron ore.
Environmentalists say the change is an effort to open the state trust lands to unsustainable mining.
It's "another example of changing our environmental laws and protections to permit a new toxic sulfide mining district in Northeastern Minnesota," said Lori Andresen of Duluth, Sierra Club Mining Chair in Minnesota.
"The DNR's bureaucrats have been mismanaging the lands and soaking up all the revenue," he said. "That land shouldn't be managed for woodpeckers and old-growth (trees). It should be managed for the highest revenue for the schools."
A Lawmaker’s Response: Proper science will resolve mine issues
Duluth News Tribune
March 17, 2011
Nancy Schuldt's March 9 column about sulfate levels to protect wild rice brought up some interesting points of discussion, most of which I agreed with (Local View: "Minnesota's mines and wild rice can coexist under the right rules").
The truth is I am simply seeking a solution grounded in scientific research that allows for the safest environmental mining in the world. That's why the bill of mine mentioned in the column calls for a committee to investigate the accuracy of the state's present, 10 milligrams-per-liter, Minnesota Pollution Control Agency rule for sulfates in waters that historically contain wild rice.
My goal is to do the scientific research necessary to arrive at a number that protects our wild-rice beds.
Let me be perfectly honest about my intent. If scientific research finds that the current limit is correct, then so be it. Our mines will have to figure out a way to treat their discharge to meet that requirement. But right now we have old, natural-ore pits that have to be dewatered in order to mine. Taconite pits and these older pits contain water with anywhere from 60 to 1,000 milligrams per liter. To dewater them in order to continue mining would take huge financial investments. Will our current taconite companies make that investment? Or will they move their operations to some third-world countries with no environmental standards whatsoever?
The same holds for the companies that want to open nonferrous mines on the Range.
That's why research is so important.
And while the Minnesota Department of Natural Resources employee who came up with our present arbitrary number may be a "respected field biologist," as described by Schuldt, the water projects coordinator for the Fond du Lac Band of Lake Superior Chippewa's environmental program, I don't believe his analysis is properly backed up by scientific research. This right here is at the heart of the issue.
With so much at stake, it's important we get it right.
Schuldt wrote that she has "yet to hear any Iron Range legislator articulate what it means to mine in an environmental manner." My family has been on the Range for five generations. I, along with my dad and grandfather, worked in the mines. While our mines certainly have changed the physical landscape of the Range, they also have won two world wars, built America and fueled our entire U.S. economy for more than 125 years. And people still flock to our area for its "natural" beauty.
I don't think anyone wants to shut down mining in Northeastern Minnesota. I also think most of us have a goal to have the most environmentally sound mines in the world, whether they mine iron ore, copper, nickel, platinum or palladium. We're all consumers demanding these minerals be mined. Let's use the proper science and work together to do it the right way.
Rep. Tom Rukavina of Pike Township represents the Iron Range's House District 5A in the Minnesota Legislature. He wrote this exclusively for the News Tribune.
Our view: Cooperation can assure PolyMet gets done right
Duluth News Tribune
March 17, 2011
Frustration was obvious. "Here we go again," nationally renowned conservationist David Zentner of Duluth wrote in an e-mail to the News Tribune this month.
The note came in the wake of proposals in St. Paul to "roll back" standards for sulfates in lakes and rivers where wild rice grows and to "relax" rules aimed at replacing wetlands lost to development, as they were reported. The measures being considered by the state Legislature would benefit mining in Northeastern Minnesota, including the high-risk/high-benefit prospect of mining copper and other precious metals. And, at first blush, they appeared to be concessions to an industry because it was promising thousands of good-paying, badly needed jobs, never mind possible environmental risks.
However, the proposal that would allow mining companies to replace wetlands at a 1-to-1 ratio, rather than 1.5-to-1, even if they replace the wetlands in a different watershed actually is a return to standards that existed before state action in 2009. If anyone has a beef about changing the rules midgame, PolyMet and other mining companies may have one here.
And the legislation regarding sulfates in wild rice waters isn't an attempt to change rules at all but to make sure the state's rules are "grounded in scientific research," as state Rep. Tom Rukavina, DFL-Pike Township, makes perfectly clear in a commentary on today's page. The state's present standard is based on observational data gathered and analyzed 60 years ago by a Minnesota Department of Natural Resources field biologist.
"I don't believe his analysis is properly backed up by scientific research," Rukavina wrote. "My goal is to do the scientific research necessary."
Until that scientific research is completed, Rukavina shouldn't talk about possibly adopting the state standard for drinking water as a replacement, as he did in a March 5 News Tribune story. There's no science to support that level would protect wild rice, either.
But Rukavina was right to write that, "With so much at stake, it's important we get it right."
Getting it right – and in a timely manner – can be a goal shared by lawmakers, mining companies, conservationists and others, all of whom would be hard-pressed to deny the upside of successful projects like PolyMet. The precious metals they'd produce are needed for everyday items, including electronics and jewelry. Those precious metals now often come from foreign countries devoid of any environmental protections at all. Thousands of construction jobs and permanent positions for the Northland are at stake, too, as well as an opportunity that may never come around again to bring new life to the former LTV taconite plant near Hoyt Lakes.
"I'm a doubting Thomas that this will be done right," Zentner, the former national president of the Izaak Walton League, said in a meeting this month with the News Tribune editorial board. "But I'm for trying to make this the best project possible."
Watchdogs like Zentner combined with state rules already in place – including up-front, bankruptcy-proof financial assurances from mining companies – can work cooperatively to achieve just that.
DNR Under Fire for Management of Trust Fund for Minn. Schools
March 16, 2011
Minnesota schools are reeling from tightening budgets and expect little help from the state, which has a $5 billion deficit.
Schools get some financial help from a state trust fund most people know little about. That financial help could balloon in coming years, thanks largely to royalties from mining on state lands.
But critics say the fund isn't generating as much money for schools as it should, and they blame the Department of Natural Resources.
The Permanent School Trust Fund was established in Minnesota's constitution. It's a nest egg that's been growing for more than a century and now totals more than $600 million.
The investment returns generated about $55 million in the state's previous 2-year budget cycle. That amounts to about $26 per student for Minnesota K-12 schools. A portion goes to each school district in the state.
Revenue from timber sales, mining royalties and other sources of income from certain state land parcels goes into the trust fund.
Most of the state's school trust parcels are in northern Minnesota, and they're managed by the DNR.
Iron mining is a major contributor to the fund and its significance is growing fast, according to Peter Clevenstine, manager of engineering and mineral development with the DNR in Hibbing.
The price of iron ore is almost 2.5 times what it was five years ago.
"If it took 100 years to get $700 million into the trust, we're looking at the next few years, that probably every four years we'll put $100 million into the trust at current iron ore prices," Clevenstine said.
But that's nothing compared to the revenue anticipated from copper-nickel mining. A proposal to mine between Babbitt and Ely would involve many school trust parcels, generating money for the next 25 years from commodities like platinum, palladium and gold.
"We're now looking at close to $2.5 billion [of] potential payout to the school trust if these deposits go forward," he said.
DNR POORLY MANAGES FUND, CRITICS CHARGE
Despite the DNR's projection of a windfall from copper nickel mining, critics say the agency has done a lousy job managing the school trust to generate funding for schools. State Rep. Denise Dittrich, DFL-Champlin, said the DNR's mission of conservation clashes with its obligation to maximize revenue from school trust lands.
"They have a conflict of interest in trying to then manage the land for the beneficiaries," Dittrich said.
Dittrich said the DNR siphons significant money away from the permanent fund for its own land management costs, keeping 70 cents of every dollar earned from managing forestry trust lands over the past five years. The DNR can pocket $3 million, or 20 percent of mine royalties a year for managing the school trust mine properties.
Dittrich said that money should be kept for the benefit of schools.
"I think you can double that revenue," Dittrich said.
Dittrich has introduced legislation to create a new agency to run the Permanent School Trust Fund with an independent director and board of trustees.
Dittrich models her proposal on Utah, a state she said has boosted a $100 million fund to $1 billion in just 10 years, helped in part by oil reserves.
The plan has the backing of an impatient Minnesota School Boards Association. Lobbyist Grace Keliher said the DNR has not followed the legislature's direction to improve financial returns from trust lands, or to sell certain properties.
"I think it's through a bunch of frustration with the present process that we're looking at somebody who's got a voice for kids, and getting someone out of the DNR to really evaluate and structure the school trust fund land program," Keliher said.
The DNR opposes the idea, saying the result could be a patchwork of land parcels, many within state forests, managed by one agency, while the surrounding forest is managed by another.
"Having a forestry division for example, is a lot cheaper, we feel, than building a new forest agency," said Bob Meier, the DNR's director of policy and government relations. "Or if we were to contract back to another entity for our services, we would have to cover that overhead somehow.
Officials have time to sort through the debate. Copper-nickel mining still appears years away as project navigate the environmental permitting process.
Lawmaker tapped to lead Iron Range delegation – Rep. Tom Anzelc says lawmakers must stick together to serve region.
Duluth News Tribune
March 13, 2011
In his new role as chairman of the Iron Range DFL delegation, Rep. Tom Anzelc (DFL-Balsam Township) said he'll work hard to maintain legislative consensus on issues of concern to the region.
"That always requires good communication, discussion and debate in the group," he said. "But in terms of mining and forestry, we generally speak as one. And in terms of job creation and diversification on the Iron Range, we often speak as one."
Anzelc said it's more important than ever that DFL lawmakers from the Range work together following the loss of long-time ally, Rep. Loren Solberg (DFL- Grand Rapids) to Rep. Carolyn McElfatrick (R-Grand Rapids) last fall.
With control of the Minnesota House and Senate shifting to Republicans this year, Anzelc said the delegation remains open to working across the aisle as they did earlier this session in support of House File No. 1, a bill that streamlined the permitting process for industrial/mining operations.
Anzelc said the Iron Range remains dependent on mining and praised the bill.
"It protects the environment and natural resources but also allows us to create jobs," he said.
Iron Range legislators will remain focused on results rather than politics-as-usual, according to Anzelc.
"Our interests as Iron Rangers are often at odds with both parties. That's why we try to speak forcefully with one voice," he said.
Anzelc was elected to succeed Rep. David Dill (DFL-Crane Lake) as chairman of the DFL Iron Range delegation.
PolyMet Expands Board of Directors
March 10, 2011
PolyMet Mining Corp. announced today that it has appointed Alan R. Hodnik and Michael M. Sill to its Board of Directors.
Al Hodnik was named President of ALLETE, Inc. in May 2009 and CEO of that company in May 2010. Since joining ALLETE in 1982, Mr. Hodnik has served as Vice President-Generation Operations, Senior Vice President of Minnesota Power Operations, and Chief Operating Officer. As Chief Operating Officer, he led transmission, distribution, generation, and engineering for all aspects of the Company. Mr. Hodnik was the elected mayor of the City of Aurora, MN from 1988 to 1998. He is a member of the board of Essentia Health – East Region and of the Area Partnership for Economic Expansion (APEX).
Mr. Hodnik has served ALLETE for 29 years, working in a wide variety of positions of increasing responsibility. He brings utility operations, strategic planning, leadership, and broader organizational development experience, as well as a deep understanding of the region served by that company.
Mike Sill has served as President and CEO of Road Machinery & Supplies Co. since 1994, having joined the company in 1988. Road Machinery is a distributor of construction, mining and forestry equipment. Educated at Dartmouth College and J.L. Kellogg Graduate School of Management, Mr. Sill started his career as a financial analyst and commercial lending officer with The Northern Trust Company. He has served on the boards of the Equipment Distributors Association of MN, Associated General Contractors of MN, and the Twin Cities Regional Board of US Bank.
Frank Sims, Co-Chair of PolyMet stated, "I welcome Al and Mike to our board. They bring extensive business experience in the upper Midwest and we look forward to their guidance as we complete the environmental review and permitting process for our NorthMet project."
Twin Metals-Franconia Deal Nets Return on IRRRB, State Investments
Duluth News Tribune
March 10, 2011
Franconia Minerals is no more, which has been a profitable turn of events for the Iron Range Resources and Rehabilitation Board and the state Department of Employment and Economic Development.
A $77 million acquisition deal, announced in December and formalized in recent days, saw Franconia's assets transferred to Twin Metals Minnesota LLC, a joint venture between local Duluth Metals and Chile-based Antofagasta.
As the deal came together, Franconia first repaid IRRRB and DEED loans, which netted the IRRRB $1.34 million, including interest on a $1.25 million loan. The 2009 loan was aimed at helping the fledgling Franconia develop its copper-nickel deposits under and near Birch Lake near Babbitt.
Then, just before the Twin Metals acquisition of Franconia, the IRRRB exercised options to spend $937,500 on Franconia stock that netted the agency $580,000 in cash and 198,728 shares of Duluth Metals stock when the acquisition was completed. That stock is now valued at nearly $537,000 and could go much higher if the operation ever produces copper.
"We've already seen a good return on our original investment, and the board will have to watch closely now to decide how we should proceed with our new investment in Duluth Metals," said IRRRB Commissioner Tony Sertich.
Sertich said more important than regaining the agency's investment, the IRRRB's initial loan helped push the development of copper mining in the region. And the money that's been repaid can go into new projects, he said.
"The ultimate goal is to see this payback with jobs and economic impact, and we think that this new, combined company is in a much better position to do that," Sertich said.
The state's DEED gave Franconia a $500,000 grant in 2008 and a $750,000 loan in 2009. It received an $800,000 repayment from Franconia including principal and interest. As part of the original loan deal, DEED also exercised the same option to buy Franconia stock that netted the same cash and stock bonus in Duluth Metals that the IRRRB received.
"It's one of those rare deals where we made money in the end," said DEED spokesman Monte Hanson.
Neither the original Franconia copper deposits under and near Birch Lake, nor the Duluth Metals deposits just to the north near the Kawishiwi River have been tapped yet. But both are said to hold huge amounts of copper, nickel, platinum and other rare minerals that, if mined, could create hundreds of jobs and millions of dollars in economic impact.
Twin Metals was formed last year when Brazil-based Antofagasta paid $130 million for a 40 percent interest in Duluth Metals' 3,000-acre Nokomis mining project east of Ely. Antofagasta has control of the board of Twin Metals and has the option to buy up to 60 percent interest in Twin Metals, which now has two major copper deposits under its control.
On Tuesday, Juan Andres Morel, the chief officer of Twin Metals, said the combined copper projects can move forward more efficiently than they could separately, consolidating "one of the world's largest copper-nickel-precious metals deposits" under one company.